OWNER OF WARSAW WIRELESS PLEADS GUILTY TO EMPLOYMENT TAX FRAUD CHARGE
MONDAY OCTOBER 17, 2011
Public Affairs Officer
COLUMBUS – Khalid Alnajar, 46, of Cincinnati, owner of Warsaw Wireless, Inc., pleaded guilty to one count of employment tax fraud. Alnajar faces a maximum prison sentence of five years and a fine of $250,000.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office; and James Vanderberg, Special Agent in Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering, Chicago Region announced the plea entered before Senior Judge Sandra S Beckwith.
According to court documents, Alnajar was the president and sole owner of Warsaw Wireless, Inc. and Warsaw Wireless of Kentucky, Inc., through which he operated multiple wireless phone stores in the Greater Cincinnati area. As the owner of Warsaw Wireless, Alnajar was responsible for collecting, accounting for, and paying over the employment taxes to the IRS. Employment taxes consist of Federal income tax withholdings and Federal Insurance Contribution Act taxes (“FICA taxes”). FICA taxes consist of Social Security taxes and Medicare taxes.
Alnajar developed a practice of paying a substantial portion of managerial salaries through unreported checks. Specifically, three of Alnajar’s managers were his cousins, Basil Asad, Hani Asad, and Ali Asad. From 2004-2007, Alnajar used three different payroll companies to pay the employees of Warsaw Wireless. Alnajar supplied these payroll companies with information relative to how many hours the employees worked, as well as the amounts they were to be paid. However, the information Alnajar supplied to the payroll companies did not reflect the true hours worked by, or the amounts paid to, the Warsaw Wireless employees. Alnajar paid only a small portion of the wages of his trusted employees through payroll and paid the rest of their salaries through personal or company checks.
Alnajar used the payroll companies to prepare Forms W-2 for his employees and Forms 941 (quarterly federal income tax returns) for Warsaw Wireless. Because Alnajar did not disclose to the payroll companies the amounts paid to employees by business check, the employees’ Forms W-2 and the company’s Forms 941 reflected only the amounts paid through payroll. By doing so, Alnajar caused Warsaw Wireless to fail to truthfully collect and pay over the full amount of employment taxes to the IRS.
Judge Beckwith will set a date for sentencing.
This case is being prosecuted by Assistant United States Attorney Ben Glassman and was investigated by special agents of IRS-Criminal Investigation and the Department of Labor Office of Inspector General.
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